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These 3 charts tell you to buy gold: Top technician

Tom Grill | Age Fotostock | Getty Images

Gold has gone nowhere fast over the past two weeks, trading in a mere $30 range. But Carter Worth, chief market technician at Sterne Agee, predicts that the metal is about to heat up—beating a path to the upside that leads gold prices up to $1,500 per ounce, which would be the highest level since April 2013.

When it comes to gold, "We remain new buyers and would be new buyers right here, in anticipation of the current 'bearish-to-bullish' reversal continuing and gaining urgency as new participants are drawn in," Worth wrote in a Monday note.

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So what, specifically, does this technician see that he likes?

First of all, gold is up about 5 percent in a month, and this rise has been technically significant.

"The strength of the past few weeks represents a tentative break about the down trendline that's been in effect since mid-2012," he wrote, and illustrated with the below two-year chart of gold.

But that's not the only encouraging sign. Worth says his thesis that gold is bottoming is also supported by a perceived "head-and-shoulder" bottom.

In this pattern, a chart trades down to a given level and rises, then makes a lower low and rises again, then falls again but not as low as it did previously. This pattern is thought to indicate that a negative trend is reversing.

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Finally, Worth pulls out his 150-day moving average, which seems to have finally stemmed its decline.


All in all, Worth expects that gold will rise up to about $1,500—nearly 15 percent above current levels.

At that level, however, Worth sees gold running into some resistance, as it will be left "back at an important level of overhead supply." In other words, many people will wish to sell gold at that level.

—By CNBC's Alex Rosenberg

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